Cape budget pact passed

September 19, 2013

With little fanfare and few protestations from a sparse crowd, the Cape Coral City Council adopted the property tax rate and the budget for the 2014 fiscal year at the final public hearing held Thursday at City Hall.

The council officially adopted a 7.707 millage rate, the same rate it tentatively set two weeks ago, which is a quarter point lower than last year. The rate, though, is higher than the 7.5159 "rollback" rate, which would have kept revenue from property taxes at last year's level.

The vote was 6-2 with Mayor John Sullivan and Councilmember Chris Chulakes-Leetz dissenting.

A mill is equal to $1 for every $1,000 of assessed, taxiable property valuation.

As for the budget, it was set at $127.1 million in the general fund, not including $21 million in reserves (two months worth of funds). Of that amount, $70.6 million will come from property tax revenue, $7.6 million will come from the new public service tax on electric bills and a $5.7 million will come from fund balance.

City officials say the impact on the average property owner - one who owns a house assessed at $150,000 less Homwstead Exemption - will be $40 more in taxes..

For City Manager John Szerlag, it was a good feeling after the long, twisted road the budget took over recent months.

"It feels good that city council realized we could no longer continue to operate the way we had," Szerlag said Thursday. "We needed revenue diversification and their vision for the city was one with a strong public safety department, good infrastructure and good public venues."

It is a budget hailed by supporters as one that will finally address some of the capital needs the city faces.

"The future of Cape Coral will be provided through infrastructure and services. When you do that, the investment will come," Councilmember Kevin McGrail said. "Hang on. The best years are coming."

Much of the talking was done by staff, with very little said from behind the dais until the tail end of the meeting.

Perhaps the most vocal was Sullivan, who said he wouldn't support the tentative millage rate, preferring the rollback rate.

Sullivan also cited statistics from a study released Wednesday that said 30 percent of Cape Coral families couldn't afford enough food as why he didn't support the budget.

"I said before there are people here who can't afford to feed their families. I said it was a mistake to support the public service tax," Sullivan said.

That tax is a 7 percent levy on electric bills.

His assertion was challenged by Councilmember Marty McClain, who asked why Sullivan had voted for the tentative .25 millage decrease two weeks earlier at the first public hearing

"I wanted to make sure the residents got something. It would have been disingenuous of me to vote for a budget when I voted against the PST," Sullivan answered.

McClain then addressed a citizen who requested any tax increase be voted on by referendum.

"Human nature has shown we won't vote to tax ourselves. We have a responsibility to be financially responsible. That's our job," McClain said. "

Complicating the budget issue is the still-pending bond validation for the new fire assessment, to cover 38 percent of department operating costs. The city hopes that will be decided upon soon. Assuming it happens, the city will add another $12 million in revenue, minus $3 million in refunded fund balances.

Since the city "budgets for what is and not what might be," as Szerlag said, the city will spend all its current $4.2 million on paving, since residents said it's the most urgent need.

If the validation is successful, the city will be able to put into motion its full paving schedule and address its other capital needs, such as vehicles and equipment.

If the courts approve the assessment, it will mean a $150 increase per household, which has been the target for city staff all along.

Without the validation, the equipment and vehicles will only be replaced upon failure.

Szerlag said the city can't afford to balance its books at the expense of capital improvements.

"This council had objectives of financial diversification to put us in position to be sustainable and to keep costs down in the community," Szerlag said. "Now we can look at a historical perspective next year and see if we can ratchet up or ratchet down the numbers.